Collection of a $600 Accounts Receivable

question 139

Multiple Choice

Collection of a $600 Accounts Receivable

• A)increases an asset $600; decreases an asset $600.
• B)increases an asset $600; decreases a liability $600.
• C)decreases a liability $600; increases stockholders' equity $600.
• D)decreases an asset $600; decreases a liability $600.

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Definitions:

Corporation

A legal entity separate from its owners, offering limited liability protection, the ability to raise capital through the sale of shares, and perpetuity.

Market Value

The market rate for buying or selling an asset or service currently.

Ownership

The state or fact of exclusive rights and control over property, which can be tangible or intangible.

Valuation Allowance

An accounting procedure that an entity might use against its deferred tax assets indicating that it is more likely than not that some portion or all of the asset will not be utilized.